Negotiations for 2007 Kia Optima in Fair Condition
I entered into negotiations with my father for the purchase of his 2007 Kia Optima to be used by my son, Adam. My father was aware that I would be using this negotiation to fulfill a requirement for this class, but it was also a true negotiation for the purchase of the car. From the research that I did, a buyer from a private seller could expect to pay right around $6,000 for this vehicle, in fair condition. However, if my father were to trade-in the vehicle rather than engaging in a private sell, he would expect to get around $4,500 for his trade. This price is significant because I wanted to pay a "family price" for the vehicle. In other words, I wanted to pay him the trade-in value rather than what he would have gotten in a sale to a private buyer. This desire was not solely to benefit myself; I knew from prior discussions that my father was dreading the process of selling the car to a private buyer. Therefore, I knew that he might be amenable to selling the car at a price below the estimated retail value, if I could show him the benefits of selling the car to me. Despite that knowledge, I was concerned about entering into the negotiation because my father is a very good negotiator, and my own negotiation skills are not as strong as his.
I did a substantial amount of preparation prior to entering into the negotiation. When I mentioned that I was going to begin looking for cars for my son Adam to drive, my father was the one who suggested that I think about purchasing his 2007 Kia Optima. I told him that I would think about it, as a way of buying time for myself before entering into negotiations with him. First, I did the research to see if the Kia Optima was within my targeted price range for the car, which was $5,000 or under, and to see how it compared to other vehicles in that price range. I examined the price I could expect to pay for the car if I purchased it from a dealer or if I purchased it from an anonymous third-party seller. I also looked at what my father was likely to get for the vehicle if he sold it as a trade-in for another vehicle. I did not have to investigate the car itself by requesting a CarFacts or similar vehicle history report, because my father is the only owner of the car, and I know the vehicle's history.
In addition to gathering the figures, I prepared my argument for why my father should sell the car to me for $4,500 rather than $6,000, despite the fact that it would be almost $1,500 in lost potential profits for him. I thought about making an emotional appeal based on the relationship between my father and Adam, but quickly realized the dangers of introducing emotion into the negotiations, because my father would then have the opportunity to use his own emotional arguments. I decided to concentrate my arguments on the convenience of his not having to go through the private-selling process, with its inherent risks and dangers.
I decided to try to keep my communications about the car in writing, as far as that was possible. My father is much better at thinking on his feet, so I worried that any in-person or telephone negotiations would provide him with an opportunity to negate all of my arguments, while I was thinking about what he said. By communicating with him via e-mail, I could consider my responses without seeming as if I was delaying the process. Therefore, I sent him my first e-mail, telling him that I had considered his offer to buy the car and suggesting a purchase price below the Kelley Blue Book value for it as a trade in. I acknowledged that it was the trade-in value, discussed the idea of a family discount, and asked for his thoughts on the price that I had offered. He responded almost immediately with an e-mail of his own with a screen shot, not of the Kelley Blue Book value for the vehicle as a trade-in, but for a dealer certified used car ad of the same year and model, but for a car with less than half of the mileage of his car and in much better condition. I responded with an email highlighting the differences between the car advertised and the car he had for sale. These initial emails seemed to serve an important purpose for both of us. For me, the email let him know that I knew what he would get for the car if he went to trade it in and also let him know that I was expecting a family discount if I purchased the car from him. For him, the email let me know that he values the car more highly than the trade-in value and that he is aware that if I go to a third-party private seller, I may feel the need to purchase a certified used car because I will not know about the vehicle's maintenance or other history.
After receiving my e-mailed response, my father called me to negotiate on the phone. In retrospect, I probably should not have picked up the phone. On the phone, socio-cultural conditioning, which had led me to respect him and defer to him, gave him a power advantage in the negotiation. I am sure that he was aware of this, though I do not believe that awareness, or even his use of the power advantage, means that he was trying to take advantage of me or do something wrong. On the contrary, because he generally considers me better with technology, despite the fact that his computer skills are more than adequate, I believe that he perceived himself to be in a low-power position when our communications were via e-mail. I definitely felt a shift in power when we began talking on the phone. His ability to quickly form counter-arguments to any argument that I made gave him another advantage in the situation.
We did not really use any conflict-resolution processes. The two of us negotiated without resorting to a third-party for help with the negotiations. However, both of us used outside resources to help us in the negotiation process. We had researched the sales price of the vehicle in order to state our desired sales price, as well as to help explain the reasoning for that price point. Furthermore, both of us clearly went to the resources sent by the other in order to examine that information.
For me, my primary ethical consideration was whether or not it was fair to expect my father to take a loss on his possible profit because of our family relationship. I was using that relationship, even if it was not a point in my negotiations, to try to get a better deal from him. Ethically, my father clearly felt as if he could not be in a buyer beware situation with me, which he would have felt was perfectly appropriate with a non-relative buyer. For example, he told me about an anticipated repair that was not causing problems but that would need to occur in order to keep the car running well. However, because I was not asking him to take less than trade-in value, I do not think that my behavior was unethical or reflected me taking advantage of him.
While this exercise helped me learn about my skills as a negotiator, unfortunately, it revealed that I need to be firmer in my negotiations. I did end up getting a "family price" for the car, but…